Nike 1Q Revenue Drops 10%, North America Remains at Core of Problems

By Sabela Ojea

Nike logged another drop in revenue in the latest quarter after seeing continued pressure in its core North America market.

The sportswear brand on Tuesday said fiscal first-quarter profit for the three months ended Aug. 31 fell to $1.05 billion, or 70 cents a share, from $1.45 billion, or 94 cents a share, for the same period a year earlier. Analysts polled by FactSet had forecast per-share earnings of 52 cents.

Revenue was down 10% to $11.59 billion, missing Wall Street expectations of $11.64 billion but in line with management views. Direct revenue dropped 13% to $4.7 billion, with wholesale revenue down 8% to $6.4 billion.

Overall, the company said that sales in its home market, North America, declined 11% to $4.83 billion, driven by a 14% drop in its core footwear sales.

"A comeback at this scale takes time, but we see early wins - from momentum in key sports to accelerating our pace of newness and innovation," Finance Chief Matthew Friend said.

Nike's quarterly results come as the company seeks to recapture growth with Elliott Hill on the top job following years of missteps under the leadership of retiring Chief Executive John Donahoe.

"Our teams are energized as Elliott Hill returns to lead Nike's next stage of growth," Friend said.

Donahoe cut Nike's ties with longtime retail partners like Foot Locker, DSW and Macy's, enhanced its online capabilities, and tried selling more merchandise directly to consumers, a strategy that is at the core of Nike's problems.

At the same time, the company's facing fierce competition from peers including Adidas and New Balance. In June, Nike cut its revenue outlook for the year and said it expected revenue to be down mid-single digits.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

October 01, 2024 17:02 ET (21:02 GMT)

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